Speaker A
In 2012, Ray William Johnson was the number one most subscribed YouTuber on the platform, which sounds like a great accomplishment, but it made him a target. Ray was in a feud with a merciless, greedy, and borderline evil company that was actively trying to leech every last dollar from big and small YouTubers all over the world. Some of your favorite creators were victims: PewDiePie, MoistCr1TiKaL, Philip DeFranco, just to name a few. The ironic part is that this company, dubbed Maker Studios, was founded by other popular YouTubers. It really be your own people. However, the true kingpin of the Maker Studios mob was a man called Danny Zappin, a federal convict who got out of prison and exploited the untapped gold mine of YouTube money. However, despite Ray's valiant efforts of exposing the evil tactics of Zappin's company, it wasn't enough. Maker Studios would go on to sell to Disney for over half a billion dollars. This dream team, guided by the vision of a federal convict, got filthy stinking rich at the expense of hardworking YouTubers around the world. This is how they did it. YouTube launched in May of 2005. Danny Zappin, AKA Danny Diamonds, was one of their early users because he was on house arrest with nothing to do but browse the internet all day. In 2000, Danny moved to Los Angeles to be an actor but failed. He claimed it's because he confronted Hollywood's gatekeepers. After being denied multiple roles, they blacklisted him. Because of this, Zappin needed money, so he smuggled ecstasy, got caught, and was sentenced to two years in prison. Danny began uploading videos to sites like Crap TV before he was arrested, so YouTube was like a shiny new toy when he got out. YouTube gained 30,000 unique users a day after its beta release in May 2005, and by the time it officially released in December of that year, it would reach a combined 2 million total views a day. By the following month, 25 million. Then YouTube reached its first 1 million viewed video, which was Brazilian soccer player Ronaldinho receiving his golden boots. In a feat of marketing genius, Nike uploaded the video under the alias Joe B, as if it was any other YouTube user instead of the multinational sneaker conglomerate. The advertising potential was looking extremely promising, which is why Google purchased YouTube for 1.65 billion within a year of their launch. With such potential for money to be made, not only did established companies get involved, but opportunistic creators as well. It's no secret that creators always have and always will be the foundation, the backbone of what makes this site amazing. YouTube content in the early days consisted mostly of just things related to Club Penguin, classical music masterpieces, memes, really bad tutorials, more memes, and Soulja Boy. But sprinkled in there were creators who made skits, storytime videos, theories of the universe, news channels, and the first YouTube influencers were starting to gain millions of views on their videos. YouTube then launched their partner program that pays a percentage of the advertising revenue when ads are shown on their videos. Most creators at this time treated YouTube like a fun hobby and not a career path. However, people like Danny Zappin saw an opportunity that he knew he could exploit. Danny told a few other creators about his vision: his girlfriend Lisa Donov, her brother Ben Donovan, as well as Shay Carl and CMG, who were all YouTubers. One night, they all got together for a brainstorm session and laid the foundation for what would become Maker Studio. Think originally the idea: we were all content creators and there are a few others, and the idea was if we could come together and share audience and build an infrastructure, we could all scale and build a company, you know, to what it is today. And I made videos, but I didn't know how to do other things like I wasn't a great editor and I didn't know how to, like, you know, shoot things. And Maker gave me a place where all that was handled, and all I had to do was just try and be funny. And that working together, you know, you can help one another, you know, and I think driving audience to one another and helping new talent that hadn't been established grow in audience, I think was really exciting. And they essentially came up with the idea for a studio to share resources and talent, similar to Hollywood studios that have been around for a hundred years. Danny thought this was revolutionary, but the idea was nothing special. Most people didn't know why we were founding Maker, and we couldn't get any of our actor friends to participate. The most popular YouTube content was low-quality webcam videos of people with simple ideas and a lot of personality. Why do they need a professional studio? Well, the answer was they didn't. And even 15 years later, many of your favorite creators today are just people in their room coming up with stuff. But Danny had a plan, and step one was to create a success story to prove this could work. Danny and the group launched a collaborative channel called The Station, which even included Shane Dawson, Philip DeFranco, and Hi I'm Ron. Maker believed each of those stars could be used to direct fans to new artists, which inspired the company to build a network of affiliated channels. And they were right. They had immediate success with Hot Girls on Teen Cribs, amassing 60 million views. "What's up MTV? My name's Ariel. Welcome to my crib. Let me show you around. Meet my less attractive friend Jasmine. She's super ugly, but don't hold it against her." The Station established an office space where they would connect during workdays to plan, shoot, and edit the content. They recruited more people to be a part of the team: Team Andrea's Choice, What a Day, Derek Cesal, the Fine Bros, who changed their channel to React, Michael Gallagher from Totally Sketch, Timothy Deetto. The list goes on and on. Their main type of content were comedy sketches similar to College Humor but way worse. "I've been working at this bar for two months now, and I gotta say, these people are really into their crap beers. Can I get a pooch?" "Daddy Sean, you guys got any Blue Caboose Barley One?" "When doppelganger Doppel box, hey teach, do you do I want, do you sp?" "I would never. You should splooge. It's the new cool thing." Most of their humor was extremely low-hanging fruit: men dressing up as women, playing on racial stereotypes, and trying to make anything as sexual as possible. Ninety-nine percent of this content aged terribly, but this was a time where the edgier you were on YouTube, the more views you could get. "We're here with two hots on a bot Kenny to see what they think about what's happening with the recession." Danny Zappin was pretty much the only person at The Station who wasn't on camera. That's because he was too busy figuring out how to get rich. Danny realized they had a money problem. They had a group of 20 or so creators with millions of subscribers, and they were generating tens of millions of views per month, but the ad revenue from the partner program wasn't enough. You see, the partner program in 2010 was not even close to what it is today. It was only available to a select group of very popular creators who had to apply and be accepted. But even those people weren't making significant money because the percentage split was terrible. The only way to make more money was to get more creators involved, but the studio only had so much space and employees to provide services to creators. This is where Danny's scheme began. Maker Studios formed a multi-channel network, or MCN. Instead of only working with the in-house creators at The Station, Maker would try to discover talent all over the world and sign them to the network in exchange for 20, 30, sometimes 40 or 50% of the creator's ad revenue. Keep in mind, YouTube would send the entire sum of the creator's revenue to the MCN. The MCN would take their cut out and send the rest back to the YouTuber. That's like your paycheck going directly to your landlord. He pays your rent and then sends you the rest. It's hard to understand why anyone would be willing to give up.
